Does wealth affect your credit score? Do you have to go into debt to build credit? Does everyone have a credit score?

The answer to all these questions is no. But if you didn’t know, you’re not alone. Credit myths are pervasive. Many Americans don’t understand the system that can affect their ability to rent an apartment, weather a medical emergency, or qualify for a mortgage.

More than one-quarter of Americans have poor credit or no credit score. Having poor or no credit burdens low-income Americans, leaving them with high transaction costs and limiting their opportunities to move out of poverty.

Many Americans conflate credit with credit cards and don’t know how to build their credit scores

Mixed messages about the perils and perks of credit contribute to misconceptions. Many people assume credit refers to credit cards and associate it with debt. But building credit does not require people to go into debt or to keep a balance on their credit cards.

Ricki Granetz Lowitz, CEO and cofounder of Chicago-based Working Credit and this year’s Urban Institute Nittoli fellow, joined Urban Institute senior research associate Diana Elliott to ask people on the streets of Silver Spring, Maryland, about their thoughts on credit.

“We were surprised at how little people knew,” Elliott said. “Across demographics and age, there were misconceptions.”

Lowitz added, “It was amazing that we kept asking, ‘How do you feel about credit?’ And they’d always answer about credit cards. They couldn’t make the distinction.”

Generating a credit score involves having at least one creditor (typically credit card companies and mainstream lenders) that reports monthly payment information to the credit bureaus. To safely build up this score, people need to pay their credit card bill or loan payment in full each month and make sure the balance on each credit card doesn’t go over 30 percent of its limit.

“What’s so frustrating is if people just knew that, they would address it,” Lowitz said.

Credit, preferably prime credit, is critical for families who need to smooth expenses until the next paycheck or pay for an emergency.

“Understanding credit and, more importantly, learning how to safely build your credit is really critical, and it can make a dramatic difference to people’s financial future and their ability to move themselves ahead financially and potentially out of poverty and into financial security,” said Margery Austin Turner, senior vice president for program planning and management at the Urban Institute.

Although credit bureaus don’t take race or ethnicity or income into account when generating credit scores, people in low-income communities are more likely to have low or no credit scores.

“Wealth and race and immigrant status matter—not in the algorithm, but in access to this information,” said Bob Annibale, global director of Citi Community Development and Inclusive Finance. “The wealthier you are, the more likely you are to have access to a financial planner or an accountant.”

The panelists said practitioners have learned that one financial education workshop isn’t enough to make a lasting impact on someone’s economic health. Financial workshops need to be integrated with workforce development programs and within workplaces.

“We have to show value and the benefit and return on investment for [employers],” said Brenda Palms-Barber, executive director of the North Lawndale Employment Network. “You have to approach it in a language that speaks to the employer. Credit-building services can help reduce the costs of turnover.”

Employers can benefit because they can build a more financially resilient workforce. If an employee’s car breaks down and they have good credit, it’s easier for them to recover quickly and affordably, Lowitz said. Her organization partners with employers to provide an employee benefit to help low-wage workers build and sustain strong credit scores.

Policies around wealth building also need to consider the importance of credit and help expand access to credit-building services. “We need to train policymakers,” Elliott said. “We focus a lot on savings, which is great, but there’s also this need to think about credit as a complement. And that’s been missing from the conversation.”